“Stop Mis-selling of Financial Products to Maintain Trust in Banking System” – V G Sekar

Jaipur, September 11, 2014

Banking is nothing but trust’ and complaints of mis-selling of financial products is resulting in erosion of the trust in banking system, said V. G. Sekar, General Manager, Department of Banking Supervision, Reserve Bank of India (RBI), Regional Office, Rajasthan, while delivering the opening address in a consultation on RBI’s Draft Charter of Customer Rights, organized by CUTS on September 18, 2014 at Jaipur. He further said that there are lot of complaints and concerns coming to RBI which indicate that mis-selling exists and RBI will intervene as it has regulatory role to protect interest of consumers.

A. B. Das, Secretary and DGM, Office of Banking Ombudsman office (Jaipur), RBI said they received number of complaints on mis-selling of products and asked commercial banks repose trust in the banks as they survive and thrive only due to trust of customers.

George Cheriyan, Director, CUTS in his introductory remarks spoke about CUTS and its interventions to protect interests of consumers specifically in financial sector. He said the draft charter issued by RBI on customer rights is a welcome step and a shift in the approach from ‘buyers beware’ to ‘sellers beware’. The charter is part of RBI’s plans to radically overhaul of customer protection norms aimed at protecting banking consumers and to discourage lenders from mis-selling. However a clear road map for the implementation of the charter is missing, leaving it to the interpretation of each bank.

Project Coordinator CUTS, Amarjeet Singh made a presentation on the key points of the draft charter and ongoing Project on ‘Right to Choice of Consumers of Financial Services, with special focus on the issue of Mis-selling and Financial Incentives in Indian Banks’.

The draft charter contain 5 rights, such as Right to Fair Treatment; Right to Transparency, Fair and Honest Dealing; Right to Suitability; Right to Privacy and Right to Grievance Redress and Compensation charter and RBI is receiving comments from the public until Sept. 22, 2014.

The purpose of the consultation was to discuss and to gather the feedback of various stakeholders on the charter and to consolidate the recommendations for submission to RBI. Deepak Saxena, Sr. Programme Coordinator CUTS welcomed the participants. The consultation was attended by around 35 delegates, including senior officers of banks, organizations working on financial consumer protection issues, consumer activists and media, who gave valuable suggestion on the issue.

For more details, please contact

Amarjeet Singh at ajs@cuts.org or 98290 15812
Deepak Saxena at ds@cuts.org or 97999 96095